Despite political upheaval in western nations and ongoing economic uncertainty, many cities around the world continue to show impressive dynamism.
According to JLL’s latest Cities Momentum Index (CMI) report, the world has become a riskier place in the past year, testing the resilience of the world’s cities.
“These disruptions are happening just as our cities are undergoing major structural change as the effects of globalisation, technological breakthroughs and rapid urbanisation combine to challenge the very fabric of our urban spaces,” says JLL’s Jeremy Kelly – Director, Global Research at JLL.
“Yet, despite the multiplicity of challenges, the 2017 CMI highlights remarkable dynamism in our major cities, many of which are consistently outperforming their national economies. Cities are taking up the mantle of globalisation and reaching out internationally to create new networks.”
The 134 cities covered by the CMI were assessed and ranked using 42 variables including GDP, population, corporate headquarter presence, commercial real estate construction and rents. Other factors included education, innovation and environment.
Kelly says successful cities are agile and open, enabling them to adapt quickly to each new wave of global change, absorb rapid population growth and strengthen global connectivity.
Cities in India (such as Bangalore and Hyderabad) and Vietnam (like Ho Chi Minh City and Hanoi), along with several in China and the United States, head the list of the world’s fastest-changing cities, with technology remaining a prime driver of momentum.
“Asia Pacific is by some distance the fastest growing of the regions, accounting for half of the top 30 fastest-changing cities,” Kelly says. “The economies of India, China and Vietnam are growing at particularly rapid rates and these markets are also seeing strong demographic growth, in terms of sheer numbers and growing middle-class populations.”
“The best-performing cities are also showing rapidly changing real estate markets, with many cities seeing strong demand drive high levels of take-up, rental growth and new office construction.”
However, Kelly points out that many Asian cities have some way to go before they begin translating their rapid ascendance into economic dominance.
“To truly become dominant economic powers, these fast-moving Asian cities need to maintain this momentum and turn it into longer-term success. To do so, they will need to improve in the areas of higher education, innovation, air quality and infrastructure.”
“The leading Asian cities –notably Hong Kong, Singapore, Seoul, Tokyo and Taipei – do not feature in the top 30 for overall momentum. Nonetheless, they all score far better on long-term measures of momentum, relating to innovation, education and sustainability – in other words, their ‘future proofing’ capacity – that put these cities at a competitive advantage over the longer term horizon.”
Interestingly, the Cities Momentum Index shows political upheaval in both the United States and the UK has so far not significantly impacted locales in those countries.
“Although the data for the Index was collected pre-election, the turmoil in the lead-up to the U.S poll appears to have had little impact on the performance of its cities,” Kelly says. “Market response to the election result has been largely positive, but many uncertainties remain around longer-term policy changes and the full impact on cities.”
“In the UK, London has maintained its strong position, ranking sixth, with its long-term strengths in education, innovation and in the retail and hotel sectors holding steady. However, all UK cities have been impacted by downgraded forecasts of GDP and office rental growth, which has impacted their overall momentum.”